Profiting from good news

SMRT Corp is reported to have made 26% year-on-year rise in 3rd quarter net profit due to higher fair revenue. That is good news for SMRT, and probably both good and bad news for commuters.

Bad news because commuters now may feel vindicated about their suspicion that SMRT has all along been making a lot of money from them by raising its train fairs a few years ago. Many will feel now that they have been taken for a ride (no pun intended).

But it is good that the corp is making money off train fairs because there will not be any good reason for fair increases now, at least for the next couple of years, I hope. I just can't imagine how its $30 million net profit (obtain in only one quarter, mind you) can be dissipated into costs except through raising wages to exorbitant levels, or skyrocketing fuel costs. Even if there is no further growth, the land transportation business in Singapore is fairly stable and predictable, so the profit will not fluctuate much.

There will be even greater sceptism now if the other major transportation provider, SBSTranit, were to clamour for fair increases any time soon. Which is a good thing.

So cheers to the profit reports!